After so many delays, many have stopped guessing about the fate of the Keystone XL pipeline, yet a surge of new options and a belief that environmental challenges are being overcome is fuelling a renewed sense of optimism in the Canadian oil and gas industry.

With rail transportation of oil standing ready to fill any pipeline transportation gaps, liquefied natural gas plans on the West Coast moving closer to reality, shale gas and tight oil plays growing by leaps and bounds, oil and gas prices firming up at attractive levels, geopolitical tensions favouring growth of North American oil and gas supplies, and companies upping their game to address environmental concerns, the gloom that hung over the sector due to worries Canada’s oil and gas production would be stranded is fading.

The change in mood was palpable at an investment conference Thursday and Friday organized by the Canadian Association of Petroleum Producers and Scotiabank, which attracted twice the attendance of the same event in December 2012, showing investors are sharing in that optimism, said CAPP President David Collyer.

With so many oil and gas companies planning growth, and infrastructure being built to move product to markets, the new worries are about how it will all get done.

There is even confidence that if Keystone XL obtains a permit from President Barack Obama this year, the next step for the environmental movement is to de-escalate its campaign against the approval of oil sands pipelines.

Environmental organizations “have put a lot of eggs in the Keystone basket, as far as making it about a significant problem of climate change, and now that has been proven not to be the case … I think it’s going to be increasingly challenging for them to continue to gain any traction,” said Cindy Schild, senior manager, refining and oil sands programs, at the Washington-based American Petroleum Institute.

Environmental NGOs are likely going to move to new targets, like liquefied natural gas or coal, rather than organize against other oil sands pipelines also in the planning stages, she said.

“Anything is possible,” said Ms. Schild, who led the KXL campaign for the American oil industry powerful lobby group.

“I don’t think they will be organized. If you lose a significant case, the symbol that it’s been, do you move to the next one, or are you going to try a different approach?” she said on the sidelines of the CAPP conference.

Tim McMillan, Saskachewan’s energy minister, provided a measure of how the province has mobilized to overcome pipeline bottlenecks caused by opposition to KXL.

About 20% of the province’s oil production moves on rail, and two new rail loading facilities are being built to load unit trains to get oil to markets.

Saskatchewan supports all major pipelines being proposed, but sees a role for rail transportation if pipelines continue to be delayed, he said.

“When we see delays in pipeline projects that meet high environmental safety standards, the market is skewing toward rail,” he said.

British Columbia helped fuel the optimism when Steve Carr, deputy minister of natural resources, said at the meeting the province’s proposed LNG tax isn’t set in stone and that fiscal terms might be finalized before the summer.

Under terms announced in its February budget, B.C. said it would introduce a tax of 1.5% for LNG plants until capital costs are recovered, rising to 7% after that.

But there has been concern from LNG developers that the tax adds to an already onerous tax burden.

“We have not landed on the 7%,” he said. “We understand this is a competitive environment.”

If the terms are acceptable, Michael Culbert, president and CEO of Progress Energy Canada Ltd., owned by Petronas of Malaysia, said his company is gearing up for a final investment decision before the end of the year.

“We want to be first,” he said, among the dozen or so LNG plants proposed for the Prince Rupert, Kitimat area of Northern British Columbia.

LNG development would boost natural gas drilling after years of slow activity in Western Canada due to low North American prices.

Further optimism is coming from the growth of liquids rich plays like the Montney, that are making great returns that could get even better if gas prices stay strong.

If KXL is approved, it would be another piece of supportive news, not the be all and end all it was a few years ago.

Refineries in the U.S. Gulf have already made the investments required to switch to Canadian oil, and aside from some additional infrastructure needs to get it there, “they are ready,” Ms. Schild said.